Health insurers and other large companies are not too happy about the first series of new health-care rules. In the New York Times, Reed Abelson reports that some of these health-care providers are troubled by the new spending requirements enacted by Obamacare:
The new standards may prove a challenge to the administration in its attempt to protect the limited-benefit plans. Under the legislation, insurers are required to spend at least 85 cents of every dollar in premiums on the welfare of their customers, and many of these plans spend far less.
In response, over the past month, the government has issued waivers to certain companies in hopes of easing any potential problems:
To date, the administration has given about 30 insurers, employers, and union plans, responsible for covering about one million people, one-year waivers on the new rules that phase out annual limits on coverage for limited-benefit plans, also known as “mini-meds.” Applicants said their premiums would increase significantly, in some cases doubling or more.
Why it’s important:
The government is backtracking on health care. Has anything even changed? And why should you care?
Well, certain companies, like McDonald’s, have threatened to strip workers of existing coverage because of the high costs of the new regulations on premium spending. Other leading insurers (WellPoint, Aetna, and Cigna) opposed the new rules, which would require them to cover too many seriously ill children—parents can now sign up for a child-only plan once the child becomes ill. Without the waiver, they’ve threatened to just stop selling new child-only policies in certain states.
The waivers deal with these concerns—for now.
Nancy-Ann DeParle, the director of the Office of Health Reform at the White House, acknowledged that the concessions given to companies and insurers reflected attempts to avoid having people lose their current coverage before the full law goes into effect while meeting the aim of improving that coverage.
“It is a balancing act,” Ms. DeParle said. “The president wants to have a smooth glide path to 2014.”
But this is something to keep an eye on. Obamacare won’t be fully instituted until 2014. Are these waivers just a Band-Aid that’ll fall off in four years? Or will they help fix the problems, ensuring that “smooth glide path”?